Secret’s Out: International Trade is Just Trickledown Economics 2.0

From @PMHarper: “The #CETA trade negotiations are the most transparent and collaborative that Canada has ever conducted. #cdnpoli“

Sure. I don’t know who PM Harper was trying to impress–maybe his mother–because no one in the Canadian laity bought that line.

There is a reason why democratically governed nations resort to secret meetings when it comes to trade agreements. The reason is that national leaders haven’t got the popular support they need to negotiate away the rights of provinces, cities, and their citizens.

Of course government in secret is profoundly undemocratic. Ordinary, powerless, uninformed people like me are more willing to tolerate this when lives are at stake. We’re even willing to put up with secrecy and unhappy surprises when livelihoods are being protected. But there’s something nefarious about secret trade negotiations where it’s uncertain whose lives and livelihoods are in play, who will win, and who will lose.

This linkage of economics and democracy isn’t some woolly-headed invention of limousine liberals or Occupy zealots. Democracy and capitalism is a marriage made in heaven, presided over by the priesthood of conservatism. Even the most enlightened Republican scribes, like David Frum, programmed George W. Bush never to express one idea without the other.

In their geopolitical liturgy, “nation-building” meant displacing other systems of governance with “democracy” so that people of the world would become more free and prosperous. Freedom and prosperity were linked too, because it was inconceivable to crusading capitalists that free people wouldn’t choose our form of industrial consumerism over the antiquated economic systems to which their histories had led them.

I’m reminded of Bush, facing his nation for the first time after the attack on the World Trade Centre, telling Americans to concede nothing to the terrorists, to resume their accustomed way of life. Then, in a tellingly hesitant and stuttering way, he searched his mind for specific examples of the defiant, nation-defining habits and routine for them to resume. The first thing to enter his head was to go shopping.

I’m not knocking consumerism as a way of life, I’m merely pointing out how deeply our idea of freedom is connected to democracy, democracy to capitalism, and capitalism to freedom. Much of the tension between the political right and left in western society results from debate about the validity and strength of those linkages. Undo one side of this triangle and the whole fragile structure of neoconservative economic, moral, and political thought collapses.

So it was with democracy in the background that I read this excerpt from a New York Times editorial, “A Way to Salvage Global Trade Talks”, referring to headway that the leaders of 150 member nations of the WTO are apparently making after 12 years of talking about trade improvements:

“[reduction of trade barriers is estimated]… to cut trade costs by 10 percent in the United States, Europe and other industrialized countries like Brazil and South Africa. A 1 percent reduction in total global costs would boost incomes by $40 billion world wide.”

While Canadians might not have been kept abreast of this 12-talk, they are at least very familiar with these arguments. We are a trading nation in a close relationship with the world’s greatest economic power. Our experience with GATT, NAFTA, and most recently CETA, has dramatized the point that, for good or ill, citizens aren’t even spectators, much less participants, in these negotiations.

Accepting that national leaders are negotiating terms to protect their citizens’ interest, secrecy still has the effect of distancing leaders from their constituents. This distance permits negotiations to accelerate in the absence of scrutiny or criticism, but at the same time weakens the authority of the negotiators. Their strategic latitude is limited by the knowledge that they’ll face the music when they return home from negotiations to seek ratification from opposition legislators, the media, and the public. Without enthusiastic backing from voters and a very clear strategic mandate, they don’t actually have the free hand they seek through secrecy at the bargaining table.

Perhaps they don’t understand how the uninformed citizen, alienated from the process, reads the language of international trade objectives. Let me translate.

When free traders talk about cutting international trade costs by 10% in industrialized economies, the skeptical layman asks, “cuts costs for whom?” Freer trade means foregoing some tariff revenue in the hope of boosting corporate profits and stimulating a trickle of new tax monies. Whether or not that results in any discernible improvement in the lives of ordinary people on either side of the agreement isn’t really the critical question. The layman’s question is, “what have we lost in order to gain this trickle.”

The idea of a nation means less and less as its distinguishing features are traded away to expedite commerce. Experts always tell us this isn’t an issue in trade agreements, but of course it is. Trade agreements decrease local authority by increasing national and international authority. As international standards and practices supercede local decision-making power, they erode our sense of place and community. On a more practical level, they affect what we grow, what we eat, how we treat workers, how we protect our natural environment, what we stock on our store shelves, how we encourage our entrepreneurs, and what we can spare for the least fortunate amongst us.

There’s no mystery here, and it’s not unique to international agreements. The same effect can be seen in interprovincial trade agreements, which impose ridiculous constraints on what we can do in the many different regions and municipalities across the country. Beer brewing and unripened cheese are matters deemed too important for local choice. National production, transportation, and food safety regulations, codified in interprovincial trade agreements, keep us safe from ourselves. On a global level, international trade agreements require the same upshift of power over our ordinary little lives, and it comes at a cost.

Freedom and democracy, two points in the holy trinity of the conservative movement, are diminished by the transfer of power implicit in trade agreements. Perhaps the effects are too subtle for our political and economic elite to sense, but little people feel the erosion of their rights and the distancing from their governments.

When the New York Times tells us that incomes would be boosted by $40 billion worldwide with a 1% improvement in efficiency in word trade, the layman would logically ask, “whose income would be boosted?” Like Ronald Reagan’s self-serving and discredited trickledown economics, ordinary people know not to bank on a drop of that benefit falling into their households, no matter what lofty promises their government and corporate leaders make.

Also, $40 billion, or some hopeful multiple of it, doesn’t buy as much individual freedom as it once did. Average it over the households in all 150 nations participating in negotiations, and it doesn’t add up to much. Once corporations and governments have taken their cut it might not amount to anything at all.

$40 billion in global income is less than the total GDP of impoverished nations like Costa Rica, Ghana, or Kenya. After years of consuming news about the costs of foreign wars, environmental disasters, and national debts, ordinary people aren’t impressed by the word, “billion,” any more. Advocates of international trade agreements, entailing the negotiation of secret terms, have to scale up their promises if they want broad public buy in.

My point is that the benefits of trade relaxation needs to be clarified for ordinary people before their governments will have a legitimate mandate to pursue these agreements more aggressively. Outraged defenders of the current practice should ask themselves why the current World Trade Agreement has taken 12 years to produce a result, and why promoters like the New York Times have to proclaim the benefits without revealing the terms and conditions required to achieve these results.

Until government and corporate leaders have the courage to negotiate with their own people before flying off to foreign hotels and conference rooms to bargain away their rights, they’ll have weak mandates and a tough sales job when they return. Secrecy is a symptom of this weakness.

If the costs to ordinary people were recognized and respected in the positions advanced by our negotiators, stronger agreements would result. If instead our government and corporate leaders persist in practices that avoid democratic accountability and erode freedom of choice at the local level, they can expect a hard time from their constituents.

This isn’t news. It’s just common sense. And common sense is all ordinary people have as they contemplate the obscured costs and benefits of new global trading rules.